Fans really like making stuff based on the games they love. We feature fan-made videos, costumes, artwork, and more here at Kotaku pretty much every day. The companies that make the games that fans love, though, are not exactly always eager to see third parties profiting off of their copyrighted work.

Microsoft has a lengthy policy governing how third-party content creators—that'd be the fans making videos and other goods—are or aren't allowed to use their game properties (including Halo, Forza, and Fable, among others) commercially. A recent change to the policy has had many players who create fanworks of Microsoft properties worried about the consequences of their creations.

The section of the rules that is causing all the trouble reads:

You may post your Item to a page or website that has advertising, but only if you do not earn any money from that advertising. For example, if you post your video on Youtube or Vimeo and there happens to be an advertisement next to it, then as long as you don't get paid for that advertisement, the fact that there is an advertisement on the page doesn't break these Rules. But enrolling in the Youtube partner program (or other similar programs), where you are entering into an agreement to get paid, is not allowed.

The phrasing has caused a great deal of confusion about what is and isn't an acceptable partner program, and if content creators who do exist by making a profit off their works, such as many Machinima partners, will be allowed to continue to do so.

A Microsoft spokesman pointed us to a post from Halo community representative Jessica Shea on the Halo Waypoint forums yesterday as Microsoft's official statement and explanation of the terms. "We would like to assure you that we not only love seeing, watching, and hearing your many different Halo-related creations, but we want you to be able to create to your heart's content," the statement reads. It continues:

That is one of the primary reasons we forged a partnership with Machinima, for example, so in theory, just about anyone could sign up as part of a simple pre-approved partner program and actually earn money on YouTube and avoid even having to think about it or apply for a separate license.

Both Rooster Teeth and Machinima have held our normal commercial licenses for years (and others can reach out to us for commercial licenses as well), so rest assured they will continue to exist as you know them. The majority of everything the community makes currently is fine, as long as they are not basically running a big Halo-based business or using Halo as if the IP was its own property.

Shea added a plea for reason and continued creativity to the community, saying, "We don't have squads of lawyers waiting in the wings to go after folks making machinima, or showing off their skills in Halo. Basically it's business as usual. So please, continue creating. And when you do, we'll continue to spotlight and share it with the community."

The confusion among creators of fan-works seems to spring mainly from a lack of clarity around what does and doesn't require a commercial license. From the explanations given, it seems that Microsoft doesn't intend to limit the content people create (beyond a statement banning pornographic materials, hate speech, or other vulgar or obscene uses). Instead, Microsoft wants to limit the methods of distribution, and the potential profits generated by it.

Content creators who throw a level walkthrogugh onto a standard YouTube account (where they don't get any ad revenue) are in the clear. Content creators who share a Halo video they create, on their own commercial website or YouTube channel, for ad revenue or merchandise sales, are likely either to require a commercial license from Microsoft or to find themselves in deep trouble. Or possibly both.

But then it gets more complicated. As Shea mentioned, Microsoft does have a commercial agreement in place with Machinima. If one of Machinima's 4000+ participating partners wanted to share a Halo video and make money from it, he or she could do so via Machinima and be in the clear.

We asked Microsoft if there is a publicly available list of those pre-approved commercial partner programs that fans can work with, but were told that no, other than Machinima, there is no public list right now.

In the meantime, the confusion around the policy—which is written in language as clear as possible, rather than impenetrable legalese—highlights just how tricky it can be to work with other people's copyrights. Anyone who's hard at work on what they hope can be the next Red vs Blue would do well to scour the game content usage rules thoroughly first.